The following is a release from the Los Angeles Controller on the inefficient spending of funds allocated to take care of the homeless issues in Los Angeles. Los Angeles Controller Ron Galperin is the taxpayers’ watchdog at City Hall, making sure public dollars are spent efficiently and effectively. He is also the elected paymaster, auditor and chief accounting officer for the City of Los Angeles.
Galperin oversees a team that conducts independent audits, manages City payroll and spending, prepares financial reports, pursues fraud and waste, and works to create a more transparent and accountable city for everyone. His reports are improving street maintenance, arts funding, management of special funds, L.A.’s trees, emergency services and many other City functions.
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Although Los Angeles has made some progress with Proposition HHH, it hasn’t been enough. The costs are too high and the pace is too slow to address the tragedy on our streets. Since HHH passed more than five years ago, homelessness has jumped by more than 45% in Los Angeles and thousands of people have died on the streets, including an average of five per day in the pandemic’s early months.
This week, I released my third review of the City of Los Angeles’ performance of the voter-approved $1.2 billion bond program aimed at reducing homelessness by creating up to 10,000 units of housing, along with interim shelters and storage facilities. I found that costs continue to rise, delays continue to mount and HHH is still unable to meet the demands of the homelessness crisis. I am calling on City leaders to implement my recommendations to improve HHH and use them to inform any homeless housing programs considered by voters in the future.
*Problems overshadow progress*
HHH projects are taking between three and six years to complete. At the current pace, 54% of all units will not open for another two to four years. Even when every HHH unit is built, tens of thousands of Angelenos will still lack housing. Here’s a snapshot of HHH:
– 8,091 total HHH housing units will be produced across 125 projects.
– 1,142 units (14%) are ready for occupancy today.
– 4,347 units (54%) are in construction.
– 2,602 units (32%) are in pre-development — not yet in construction.
HHH costs have reached staggering heights. For projects in construction, the average per-unit cost jumped to almost $600,000 in 2021 — up from $530,000 in 2020.
– 14% of units in construction cost more than $700,000 per unit.
– One project in pre-development is estimated to cost $837,000 per unit, nearly $100,000 per-unit more than the most expensive project in 2020.
If nothing changes, I believe costs could reach $900,000 or $1 million per unit.
*Changes needed*
The City has started implementing two of four major changes I have recommended in previous reports, but more urgency is needed going forward.
– Changes in progress: (1) My recommendation to speed up the City review processes for HHH-funded projects; and (2) my recommendation to acquire and convert existing buildings for housing.
– Changes not implemented: (1) My recommendation to build interim housing and facilities using HHH funds; and (2) my recommendation to evaluate the City’s ability to change course on expensive or stalled projects before finalizing HHH loans.
*Mapping HHH projects and costs*
Along with the report, I created interactive maps showing the cost and status of the City’s 125 HHH projects. Users can click on a pin to view information about each project, including the developer’s name, project costs, current status and more.
My recommendations to improve HHH will make a difference now and should serve as a guide for future homeless housing programs. If the City doesn’t learn from its mistakes, it risks repeating them. Angelenos, sheltered and unsheltered, cannot afford that to happen.
Explore the HHH report and story map at lacontroller.org/problems-and-progress-of-prop-hhh.
Very truly yours,
RON GALPERIN
L.A. Controller
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me
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